Tuesday, January 01, 2013

Everything you need to know about the Fiscal Cliff deal. But were too confused to ask. Update!

Smokin' Joe Biden rides to the rescue and finally gets through a fiscal cliff package.
Courtesy of the Washington Post: 

 — Tax rates will permanently rise to Clinton-era levels for families with income above $450,000 and individuals above $400,000. All income below the threshold will permanently be taxed at Bush-era rates. 

— The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)

 — The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation, as a concession to Republicans and some Democrats in rural areas like Sen. Max Baucus (D-Mt.). 

— The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over.

 — The pay freeze on members of Congress and all other federal civilian employees, which Obama had lifted this week, will be re-imposed, . 

— The 2009 expansion of tax breaks for low-income Americans: the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit will be extended for five years.

 — The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class. 

— The deal will not address the debt-ceiling, and the payroll tax holiday will be allowed to expire. 

— Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000. 

—The full package of temporary business tax breaks — benefiting everything from R&D and wind energy to race-car track owners — will be extended for another year.

 — Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified. 

— Federal unemployment insurance will be extended for another year, benefiting those unemployed for longer than 26 weeks. This $30 billion provision won’t be offset. 

 — A nine-month farm bill fix will be attached to the deal, Sen. Debbie Stabenow told reporters, averting the newly dubbed milk cliff. 

I understand that the House is supposed to vote on this by 1:00 EST today. However there are still rumors that many House members are not planning to vote for it and John Boehner has also made some remarks about possible modifications, which would kill the bill outright.

Still there is hope that it will pass.

Of course this bill only postpones those deep spending cuts for two months so it really is nothing more than a Band-Aid applied to a potential internal hemorrhage, but it is still a lot better than many thought the Senate could ever hope to agree on.

I wonder if this new Congress will really be any more rational or if THIS is the kind of thing we will see for the next two years?  God, let's hope not.

Update: There are some who think the President completely punked the Republicans with this deal:

Higher taxes on the richest Americans (the level is yet to be determined, and the president pointedly stayed away from confirming the $400K/$450K numbers floating around, but taxes are going up). He just forced Grover Norquist's Republican party to allow a tax increase. Big. F*cken. Deal. 

The middle class tax credits, such as the Earned Income Tax Credit, child tax credit education tax credit and other Obama stimulus tax credits are staying in place for 5 years, as are the breaks for small businesses, especially for the clean energy industry (I don't think most people running around with their hair on fire realize how big a deal this is for the environmental community). The Alternative Minimum tax is fixed permanently not to affect the middle class. 

Unemployment benefits extension. 

An increase in the estate tax rate to 40%. 

What do the Republicans get in return? Bupkiss. Nada. Nothing. A big fat zero. So basically, the president permanently protects working people and the poor and the middle class, permanently raises taxes on the rich, and the additional tax revenue from that. Republicans get no entitlement changes, not even a permanent aversion of the cuts hitting defense and other Republican sweetheart industries.

I know there are those on the Left who think the President gave away too much, but in the end it looks like the President did that whole Jedi mind trick thing again.

Update 2: Politicususa agrees that the President (And Joe Biden) cleaned the Republican's clock..


  1. Joe deserves a lot of credit; all across the spectrum.

    Happy New Year!

  2. Anonymous7:04 AM

    Admirable job on behalf of Vice President Biden throughout!

  3. This is absolutely Biden's moment. He has decades' long friendships with members on both sides of the aisle and brokers agreements when no one else can.

    He has to be the most under-rated man in Washington. Smart as a whip, good natured and able, he's mostly known for his ability to shoot from the hip and say what's on his mind, his supposed "gaffes". To me that's pretty endearing to be so genuine after so long in politics. He has my do-doubt-at-all vote for President when the next election rolls around.

    1. Dinty9:22 AM

      Agree. Biden's a class act, very smart and without a doubt under-rated, which in cases like this is an asset.

      He reminds me alot of my father.

  4. Hmmm. I can only conclude that I am so poor, none of this has any affect on me at all. Nearly the same as being so rich it has no affect. With some subtle differences, of course.

    1. Anonymous8:47 AM

      You could pretend you're very rich and say that this is going to cost me 3 cents on every dollar I make over 400 thousand. At worst. Or take consolation in the fact that you'll be able to find new escape routes through tax dodges to just avoid it all. And after all, if you're that wealthy then you'll already know that nobody in America actually comes even close to paying the prescribed 35% anyway. LOL.

  5. Anonymous7:56 AM

    The Democrats won the White House and Senate/Now compromises GOP or you'll packing your free-paid=for=by the House cardbood cartons this time in two years. Your days are numbered.

  6. ibwilliamsi8:10 AM

    What do the Republicans get in return? The right to have every knuckle dragger say "The Dems caved to $450k" because that's ALL any knuckle dragger understands, and it put us in a TERRIBLE bargaining position. I don't care if we DO go over the cliff, giving them bragging rights on that was unconscionable. THAT IS WHY THE R's PUSHED IT SO HARD.

  7. Anonymous8:22 AM

    A little bit more tax on profit or earnings 'over' 400K and 450K and some thing the president cleaned some clocks??
    Actually, for political purposes each side will spin it to their advantage. I know right now without readinig about it that the hard right at Redstate will be saying they need to get rid of the Republican party. If that makes some people feel warm and fuzzy then good for them. And then of course there are the pres's supporters who will be jumping for joy, or at least wanting to make it look like that.
    In truth it's a sellout to the right.

    What's wrong with America is income disparity and the knocking down of the middle class, making them the poor. All while the top 2% get wealthier and are given even more tax dodges that will nullify any measly tax hikes over the prescribed amount. For anyone on the left to try to spin this as a good effort by the president is selling the farm and helping to make damn sure the status quo is not tampered with.
    On the plus side, maybe it will put off having the middle class rise up and do something about it until it's too late because they have lost any political clout they ever had.

    1. Anonymous9:17 AM

      Actually, there are a lot of tax increases on the upper 1%, or maybe you didn't read the summation that Gryphen provided?

      You're right about income disparity but what is the president supposed to do -- Pass a Don't Be a Douche and Give Yourself a Big Salary Law?

  8. Anonymous8:41 AM

    It's comforting to see that nearly everyone took the bait and bought the spin for Biden! Predictable though, as a little political diversion of the main message usually sells well. Especially when a good selling job is so necessary right now.

    1. Dinty9:20 AM

      Can you imagine if Sarah Palin was in office as VP and this sort of thing was at stake? LOL, she'd be so far out of her depth she could never broker a deal like this.

  9. Joe Biden:


    1. Anonymous12:58 PM

      I would Chaney is in he running as he ran a lot in early Bush days. -E

  10. hedgewytch9:04 AM

    This is the news I was hoping for this a.m. Especially about the middle class tax rate. That would have impacted my family very clearly. As a self-employed person, I intentionally pay my taxes at a rate of about 30%. Now I can look forward to having some tax return back this year.

  11. Not to take anything away from President Obama's personal likeability and charm (for us sane progressives, anyway), or to take anything away from VP Biden's personal charm and likeability, either...

    ...but isn't it "interesting" that Kentucky Senator McConnell proved less recalcitrant dealing with the white sidekick guy, rather than the Lone Ranger black guy?

    Don't bother making your racism less obvious, Turtle Man.

    1. This is the first thing that popped into my mind too... Sad.

  12. Anonymous9:33 AM

    Could have, SHOULD have been a better deal.
    What do Republicans get? The chance to screw over the poor 2 more times in the next 2 months: the debt ceiling and resolution of sequestration.
    Is it possible their corporate masters will tell the fools not to fuck up this time? It won't matter. According to the Derposphere, Republicans lost because they weren't conservative enough. So Teabaggers will dig even deeper and the type of shit bill that will get presented in the House will reek so, that Jersey will inquire as to the aroma.

  13. Anonymous10:13 AM


  14. Anonymous10:19 AM

    One more...


  15. O/T Baldy's Babblings on FB a few minutes ago...looks like the "door closed" in her ugly face at Fake News...

    " In this new year, as jobs change with doors closing and opening, kids growing, relationships evolving, and life throwing curveballs, may you resolve to stay engaged and optimistic. May you pick your battles wisely. And may you live life vibrantly! God bless you all and God bless our great country as we promise to live out 2 Chronicles 7:14. Here’s to liberty!

    - Sarah Palin"

    LMAO! Nice try Baldy...the bottom line...you...don't have a job...your family's relationships have been hit with the deadly Palin curse...you're thisclose to getting indicted on Dairygate...it's just up to the lawyers who are negotiating on your behalf what's going to happen to YOU...and don't forget CreepyJr!

    Fuck off Baldy...2012 was a very BAD year for YOU and 2013 ain't looking any betta! LOL!

    1. Anonymous11:49 AM

      Can you believe they are trying to get residents of the Valley area to contribute to the Dairy to keep it open? It was on the Anchorage news last night. Sarah's friend was doing the talking - that likes cows - remember her?

      Everyone read Andrew Halcro's last blog as he addressed this subject again. He is stopping his blog (sad day for all of us!) due to becoming President of the Anchorage Chamber of Commerce.

  16. Anonymous11:03 AM

    White House Claims Victory In Fiscal Deal

    They say they've broken the back of Republican intransigence on taxes. “A good precedent,” says a senior White House official.


  17. Anonymous11:47 AM

    Looks like the House is going to amend and send back to the Senate (who went home already!).

    I cannot say often enough - vote these fucking assholes out of office if they are up for reelection in 2014.

    They do nothing more than obstruct the President and make the government appear horribly throughout the world!

    To think they are blocking money for the storm in New Jersey and on and on. They do NOT represent the folks that elected them!

    A House member is now on TV blaming the Senate! They are so out of touch w/America! I want to knock their blocks off!

  18. Anonymous12:26 PM

    No wonder Cantor was smirking last week when Plan B went down

  19. Anonymous2:57 PM

    Not too happy about the sell-out of federal workers. The price of our milk goes up just like everyone else's. The price of our health insurance goes up. We have to do more work for the same pay because of hiring freezes. Obama's been a big disappointment for labor.

    Also, raising capitol gains to only 20% is b.s.--not for the little guy, who owns a rental apartment, but for the hedge fund managers who get paid in anything but "salary" so they can dodge taxes.

    We need to talk about improving social security and medicare, not cutting them. Blood letting as a cure has been proven not affective.

  20. Anonymous4:23 PM

    I think they should have ended Home Mortgage deduction for second homes.

    I also think that our representatives should have to put their holdings into blind trusts to be in office so they don't use their position for financial gain...

  21. Anita Winecooler7:15 PM

    I purposely din't watch television today because of this bullshit. Someone on the radio said that 250 grand, adjusted for inflation comes in around 389 grand in 2012 dollars.

    The house just passed the senate's measure, Boehner and Paul Ryan voted FOR it, Eric "dweeb" Cantor voted AGAINST it. I thought Boehner and Cantor were bff's? Hmmm do I smell tyranny???

    The President is going to do a speech in the briefing room later - DAMN.... Gloat, President, Gloat!!!

  22. Anonymous3:17 AM

    part of the deal is to rescind the the part of the affordable care act which paid for "in home care"
    for the elderly. seems the repukes want their
    health care industry to "house" folks and make
    their profits. the worst part is that congress
    "KNOWS" that it is cheaper for medicare when
    the elderly are taken care of within their own
    home vs being cared for at a "for profit"
    institution. the above is from reading reports
    last nite......

  23. Anonymous12:38 PM

    -...the payroll tax holiday will be allowed to expire.

    So now when the RWNJ's at work say Obama raised their taxes, I can't argue with it. He is raising our taxes. WTF.


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